The Wisconsin Elephant

The big story for the next month is going to be the recall of Scott Walker. The Democratic primary is on Tuesday and they seem to be coalescing behind a semi-electable candidate. And then, in June, we’ll have the recall election. If you want to keep up, I highly recommend Ann Althouse (actually, I recommend her even if you could give two shits about the election). She’s front-and-center of the fight, objective and insightful.

For obvious reasons, I see this is a critical election. State employee benefits are the bomb hovering over the fiscal futures of many states. And it matters who is making the decisions. Steven Malanga explains why:

Indiana’s debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois’s accumulated obligations for the same benefit average $3,399 per person.

Illinois is an object lesson in why firms are starting to pay more attention to the long-term fiscal prospects of communities. Early last year, the state imposed $7 billion in new taxes on residents and business, pledging to use the money to eliminate its deficit and pay down a backlog of unpaid bills (to Medicaid providers, state vendors and delayed tax refunds to businesses). But more than a year later, the state is in worse fiscal shape, with its total deficit expected to increase to $5 billion from $4.6 billion, according to an estimate by the Civic Federation of Chicago.

The reason is because Illinois employees get extremely generous healthcare benefits and pensions, funded entirely by the state. Even Rahm Emmanuel is beginning to notice businesses fleeing for Indiana and Wisconsin. Illinois is the disaster Walker wanted to avoid.

But there is a political price to pay for that. Or … maybe not. The funny thing is that the Democrats aren’t running on the issue that sparked the recall.

Since last summer, unions have been throwing millions at defeating the man who reformed collective bargaining for government workers and required union members to pay 5.8% of their paychecks toward pensions and 12.6% of their health insurance premiums, modest contributions compared to the average in private business. As the May 8 Democratic recall primary nears to determine who will run against Mr. Walker on June 5, this should be their rhetorical moment ne plus ultra.

So, let’s see. Milwaukee Mayor Tom Barrett, the front-runner, has focused his campaigns on jobs, education, the environment and “making communities safer.” One of Mr. Barrett’s ads singles out “Walker’s War on Women,” with nary a mention of collective bargaining. Former Dane County Executive Kathleen Falk is heavily supported by union groups, but even her issues list makes only passing reference to collective bargaining.

There’s a very good reason they aren’t running against Walker’s reforms: because they’re working. Wisconsin property taxes fell for the first time in two decades and their business environment is now ranked as top 20. The state has already saved a billion dollar, mostly by allowing governments to shop for health insurance rather than forcing them to buy it through the union. And, in fact, the changes saved union jobs, allowing costs to be cut without firing teachers. Thousands of union employees still have their jobs today — albeit with lesser benefits — thanks to Walker and the Republicans.

The Democratic refusal to run on this issue is an acknowledgement that Walker was right.

The unions can see how dangerous this is. The only way we are supposed to deal with these problems is by raising taxes. If Walker is re-elected, it will not only vindicate his reforms but show that politicians can take on the unions and still win re-election. And so they are pulling out the stops.

(Of course, this stop out-pulling is coming without the media terror that would ensue if this were a Right Wing recall. If Sarah Palin talked about “taking out” a governor, she’d be forced to apologize, unlike Richard Trumka. If outside money were pouring in, we’d hear about Koch Brothers and Citizens United. And I’m sure the unions will try to re-ignite the protests — only without the hand-wringing that accompanies Tea Party rallies. The fight in this election is on many fronts, the media being one.)

Keep an eye on this election. And if you live in Wisconsin or know those who do, encourage them to vote like hell. This may end up being more important than the November election.